The complimentary service table presents a technical strength to weakness ranking of the different U.S. Equity sectors indices. The number 1 is the strongest position. 

To garner additional insight into an indices technical position, a basic understanding of JS Services proprietary MARKETCOLOR analysis is needed.  
MARKETCOLOR is a color-coded trading tool that analyzes multiple technical indicators ranging from trending, trending ability, non-trending oscillators, turning points and extreme deviations. The program applies a unique proprietary system to each indicator and presents the result in a color-coded table. The conclusion is a picture of a market's technical profile.

The following is an outline of the different technical indicators analyzed, a description of the color code system, and a guide to interpreting a market's color profile.

Technical Indicators Analyzed




Color-Code Table

Buy Signal Bull Trend Transition Bull Transition Bear Bear Trend Sell Signal Neutral Extreme Trending

 Color-Code Table


Analyzing the MARKETCOLOR profile
 
To begin analyzing a MARKETCOLOR profile the 1st step is to determine if the market has a trend bias or not. To do this the color profile of the Trending indicators; MA and DMI should be noted.
 
Does the market have a trend bias?  What is the color position of the DMI and Moving Average?
A GREEN, BLUE, ORANGE or RED color signifies a trend bias. If the color of either the MA or DMI indicator is BROWN the other indicators trend color should be discounted. If both are BROWN the market is in a NEUTRAL posture. 

In a NEUTRAL trend bias the analysis should focus more on the Oscillator indicators. The Moving Average indicator can be in a YELLOW or extreme position which would signal caution to any DMI signal.
If the market has a trend how strong is it?  Do both trending indicators confer?
If both Trending indicators have any combination of GREEN | BLUE or ORANGE | RED the market will have a strong trend bias. An AQUA or PINK color is a transitional color and should NOT be considered trending.

After a trend has been determined the next indicator to look at is the market trending ability or ADX. 
Does the market have follow through potential?
An ADX with a BROWN color signals that the market is not showing any trending tendencies and would discount the trend color bias. In this instance greater weight should be placed on the Oscillator indicators.

A PURPLE color signals a trending market and will add weight to any trend signal and discount the Oscillator indicators. A trending market with trending tendencies should then view the Turning point and Dynamic Channel extremes.
Is the trend at a turning point?
The FSTOCH (Fast Stochastic) and SSTOCH (Slow Stochastic) Turning Point counter trend signals, show warning that the current trend is ready to take a pause and possibly reverse. A trend reversal signal would have a counter trend action color (GREEN or ORANGE) associated with it and should always be respected. A YELLOW color is a signal that the market is at an extreme and the trend is exhausting with the possibility of a pause or reversal of the current trend bias.

Turning point indicators with like trend bias colors will add weight and reinforce the current trend.

Is the market at an extreme?
The Dynamic Channel color profile shows if a market is moving to or is at an extreme. All other colors should be noted for their support for or not for the current trend. 
Is the market in a Neutral posture?
If the market does not have a trend bias or does not have any trending tendencies then the Oscillator indicators (RSI, ROC and MACD) will determine the markets tone.

The Oscillator indicators chosen are divided up into different time frames. The RSI (Relative Strength) being the shortest followed by the ROC (Rate of Change) and then the MACD (Moving Average Convergence Divergence) for the longer-term outlook.
Is the market overbought or oversold?
If any of the Oscillators are at an extreme they will produce a color signal. The RSI (Relative Strength) is the only Oscillator indicator that can produce a momentum signal with a GREEN (BUY) or ORANGE (SELL) signal associated with it. This signal is usually early in a market's transitional posture. 
What is the general tone or MC Value?
The market's technical "color" profile is summarized into a single numeric value - the MC Value. The value is based off the color position of the different MarketColor Indicator technical systems. Markets with more systems in a positive position will have a greater positive MC Value and markets with more systems in a negative position will have a more negative value. Markets counter balanced or neutral color will have a value of zero (0).

The MC Value is by itself is a stand-alone indication of a markets' strength or weakness. The value has a range of +11 to -11. A market with an MC Value >+3 will have a positive bias, <-3 negative bias, +3-+1 slightly positive, -1-3 slightly negative, and 0 neutral or no bias.
Conclusion
After going over the MarketColor profile and noting the MC Value, a markets underlying technical tone will be revealed. This result should be used as a component when making trading decisions with or without other supporting technical or fundamental work.


Know the code.

It is essential to have a general understanding of each indicator type to get the most out of the MarketColor analysis. Any serious student of the market should take the time to garner a general understanding of the supporting indicators to best profit from subtle nuances that they will present. This can be found in the MarketColor Indicator Explained.


For sample MarketColor analysis examples, please click here  MarketColor Example.

Company Profile Our Trading Tools FAQ's Contact Login